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Human Resources » Compensation & Benefits

Chrm Message From: suraj2 Total Posts: 19 Join Date: 10/09/2009
Rank: Executive Post Date: 17/09/2009 10:12:38 Points: 95 Location: India

Dear All,

I have recently joined a company. Here what I found is that the Basic of all employee is very less, It's not even 10% of the CTC. Can any body help me out about the details how the pay structure should be. As per my knowledge the basic pay should be 50% of the CTC. Is this correct? Can anybody provide me the link or book name which provides me the legal aspect of Basic Pay.

Thanks in advance


Chrm Message From: harishsrinivas Total Posts: 2 Join Date: 10/09/2009  
Rank: Beginner Post Date: 29/01/2010 13:24:14 Points: 10 Location: India
No rule or law to fix the Basic to a percentage of CTC usually many companies fix basic between 40 to 60%.  If less salary, for PF, they ensure basic salary more than 6500, HRA vary on the metro 40 to 50%. Conveyance - 800/month.  Medical Reimbursement – 1250/month. Provident fund - (12% of basic salary). ESI – 4.75%.  LTA can be 8.33% or 2months basic.
Chrm Message From: smkakkad Total Posts: 2 Join Date: 10/09/2009  
Rank: Beginner Post Date: 31/01/2010 07:30:59 Points: 10 Location: India
The basic pay is generally kept in the range of 40% to 50% of total CTC however ideally any pay element should not be higher than the basic pay becuase whenever we talk of salary from the statutory point of view basic pay comes first in mind and the other pay elements are generally derived from the basic salary which should not be greater than the original salary amount which is basic pay.
Chrm Message From: t_sampath Total Posts: 24 Join Date: 10/09/2009  
Rank: Executive Post Date: 09/03/2010 12:51:59 Points: 120 Location: India

Hi Srinaren

I just happen to see you posting. In your posting you have mentioned that  "As per the supreme court ruling, even the salary shown as special allowance and food allowance will also attract PF as recently I had a discussion with Regional PF Commissioner"

Can you share the Super Court ruling on this and also throw more light  on this ?




Chrm Message From: humanresource2010 Total Posts: 5 Join Date: 10/09/2009  
Rank: Beginner Post Date: 11/03/2010 14:13:32 Points: 25 Location: India

Hi Suraj


In that context the company may be looking from below mentioned points.

Keeping low Basic (but in concurrence to PF act & Minimum Wage Act) the company might be believing in max take home salary to employee with min ded in terms of PF as all the necessary deductions takes on the basis of Basic salary....

Other context / strategy of organisation (particularly in sales & mktng organisations) they will be they must keeping fixed pay min and variable pay max (which you have to validate thrgh the break up of your total CTC...

this is what i perceive ..



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